In this “celebrating the 20th anniversary of Rick Astley’s debut single, Never Gonna Give You Up” edition:
- Feature: A Day in the Life of Business Television
- Trading Notes: throughout the column are trading notes on TransCanada Corporation, Bank of Montreal, Sun Life Financial, and PH&N Total Return Bond Fund.
It’s been several months since I’ve had a chance to update the website and I’m feeling guilty about it. So what better way to get myself back into the game by overcompensating and doing something completely insane? So I’ve decided to spend a full day watching nothing but business television. Yup, I’m going to watch an entire programming day of Canada ‘s Business News Network and keep a running diary of what’s going on. By the way, their live broadcasting day is 13 hours long. When mentioning the idea to a number of people, the reactions included the following:
- “you’re kidding, right?”
- “that’s pretty fu*%ed up”
- “why would anyone want to read that?”
I realize this represents a test of endurance for me as author and you as reader. At times it’s not going to pleasant and we’re all going to want to give up. But we have to plug along, keep the dream alive, and finish this even if it kills us. It is our collective destiny. In terms of the technicalities, I should mention that I can switch to other channels only when BNN is repeating a segment or heading to commercial. The first channel that I switch to must be CNBC. This keeps the focus on business television. If CNBC is also at commercial, then all bets are off. With that, let’s begin:
7:52am: BNN-TV takes the Bloomberg TV feed until 8:00 . Let’s just say that Bloomberg TV has all the personality of a turnip.
7:53: CNBC is telling us that high net worth individuals world-wide have assets totalling $37.2 trillion, up 11% since 2005. The highest growth has come from Singapore, India, Indonesia, and Russia. These are the kind of factoids that have become staples of business television. For example, the other day BNN was interviewing some pizza expert who told us that 30% of the cost of producing a pizza goes towards cheese. Based on my last experience at Pizza Pizza, I figured it would be more like 5%. That pie had one hell of a receding cheese line. Anyway, apparently the spot price for cheese has increased dramatically over the past year. I need to know these things.
7:59: BNN is about to begin the broadcasting day. I remember when this network started in 1999. In the moments before they went to air, I was close to spontaneous combustion. Imagine an 8-year old on Christmas morning and you have the idea. I almost needed sedation. The Market Gal, not really understanding how much the channel was going to inconvenience her over the years that followed, just ignored me.
|BNN television: As The Market Guy keeps telling his wife, the ticker tells a story. She’ll never believe him.|
8:00: Here we go. Linda Sims leading off. It’s entirely possible that Market Dad has a non-sexual crush on Linda Sims. When I mentioned the prospect of doing a running diary, he mentioned her 2 or 3 times. Maybe he has a thing for the grey streak in her hair. Think John Davidson from the 80s, only in female form. No, I’m not suggesting that Market Dad had a thing for John Davidson. Let’s not get off on the wrong foot here.
8:02: Canadian dollar up to 94.20 cents. I’ve been picking up $US with every 2 cent move over 90 cents. This is more for travel purposes than anything else. We took a trip to New Hampshire a few weeks back and with the exchange rate and no sales taxes to speak of, the $US prices on goods are actually cheaper than we’d pay in Ontario. I don’t know if I can bring myself to buy clothes in Canada as long as this is going on. Although Market Gal is still encouraged to buy at Reitman’s (yes, I still hold a position).
8:08: Top story involves a possible gold merger between Yamana, Northern Orion, and Meridian. I couldn’t care less. We saw Live Free or Die Hard last night and the plot revolves around a lunatic taking down the computers of the world. Naturally mayhem ensues and Bruce Willis has to save the day. The movie does make one think of the value of hard assets such as gold. However, I’m still scoring low on the paranoid index, gold stocks don’t pay a dividend, and I can’t bring myself to research the wedding stats from India . But hey, India now has all those high net worth folks…hmmm. Nah!
8:10: The first of what should be 5000 E*Trade commercials. The other day I was on their website and noticed their “10-Second Advantage,” which promises to complete your trade within 10 seconds. I especially enjoyed the following disclaimer:
“This offer does not apply in fast markets, if exchange opening is delayed, during trade halt situations, or in the case of system failures. “
In other words, the offer is invalidated whenever anything that might actually lead to a delay happens. Thanks E*Trade!
8:25: Lou Schizas makes his first appearance. He typically handles viewer questions and always brings some technical analysis to the table. Besides, every network must have a middle-aged, glasses-wearing, balding guy behind the desk. CNN has Ali Velshi, CNBC has Ron Insana and Steve Leisman, and we have The Scheezer. And yes, I’d put money on the fact that his buddies call him The Scheezer. Although it’s entirely possible that guys named Lou don’t require a nickname. Can we get a ruling on this?
8:31: CNBC is debating on whether or not the Fed will move to weighing overall inflation more than core inflation. A former fed governor says no. I could very well be the only Canadian psychology instructor who is actually interested in this.
8:36: Back on BNN, Mark Bunting is updating international markets. Good night in Hong Kong, Tokyo, and Australia. Right now my international holdings are focused in the Mac Cundill Recovery C Fund and the O’Shaughnessy International Equity Fund. The former does some currency hedging, while the latter does not. I like having both approaches in play. Sure, the fees are higher than those offered by an ETF, but I can’t argue with their investment philosophies and performance.
And while we’re here, we all know that most actively managed funds struggle to outperform their associated indices. Most years only a small minority of managers are able to outperform, let alone do it over time. Well guess how many index-ETFs outperform their index? That would be about zero. If you’re investing in an index-ETF, it has management expenses and tracking error. So it’s basically impossible to match the index, let alone outperform. Underperformance is being locked-in right at the time of purchase. I’m just tossing this out there, given that an increasing number of folks are switching to ETFs and ETFs alone. Personally, I use both index-ETFs and actively managed funds. That way I get the near index returns of the index ETF and at least an opportunity to beat the index with some actively managed entries. So far so good.
8:43: CNBC is talking about Michael Moore’s new film, “Sicko.” Joe Kernen is telling us that any form of socialized medicine is contrary to what the United States is all about. I could be really sarcastic right now.
8:51: BNN is interviewing the head of the Aeroplan Income Fund. It has a $4.1 billion market cap, is trading over $20 and returned over 50% in the past year, not including distributions. I remember thinking it was too expensive when on its first day of trading it popped 18% off the IPO price of $10. What’s the punch line? I’m just a putz with a website.
9:10: Talk has shifted to the BCE bidding process that supposedly concluded a couple of days ago. Let’s revisit the top 5 words or phrases that analysts, commentators and potential bidders have used to describe the BCE auction process:
1. “needlessly complex”
3. “broken promises”
5. “potential conflicts”
This also doubles as the list to describe the Canadian government’s treatment of investors. Yes, BCE has now confirmed every suspicion that it functions like the government. Beautiful.
9:18: Amanda Lang joins us from Chicago where she is reporting on the jury deliberations in the Conrad Black trial. My interest has now reached a solid 2 out of 10.
9:28: CNBC is telling us that Onex is part of a group purchasing Allison Transmissions from GM for over $5 billion. Onex CEO Gerry Schwartz is married to Chapters Indigo head Heather Reisman. Note to Heather: The first thing on your “To Do” list should be updating your pricing to reflect the stronger Canadian dollar. There’s no reason to see $13.99 Canadian, $9.99 US on the same book when our dollar is trading at 94 cents.
9:30: North American markets are now open. To celebrate, I’m grabbing some pineapple.
9:39: TSX up 70, Dow down 12, Nasdaq up a fraction. My interest in the Nasdaq hovers between a 0 and 1 out of 10. It’s full of high valuations, cut-throat industries, and almost no dividends. Other than that I’m sure it’s fantastic.
9:45: My Rogers digital box just cut out and has to reboot. That gives me time to check some analyst ratings on the Internet. As it happens, this morning’s Daily Edge at Scotia McLeod lists Rogers as their top pick in the cable sector. The report notes that digital penetration has reached 55% of basic cable. I wonder how many of that group had their digital boxes cut out this morning.
9:59: Pat Bolland at the desk. For some reason I can’t remember if he still goes with the whole “bowtie on Fridays” thing. If not, we may have to start a petition.
10:04: In what has to be the least-surprising ruling of the year, the Supreme Court of Canada unanimously upholds the ban on tobacco advertising. BNN gives us a Rothmans quote. If anyone trades off this news, I’d be very surprised.
10:08: CNBC is teasing us with the question, “what’s black and white and a really bad investment?” Newspaper stocks! No kidding.
10:09: Both financial networks are at commercial, so I switch over to TV-Tropolis and get the first laugh out loud moment of the day. They’re playing reruns of the CTV 80s classic series, Night Heat. The heavily-synthesized music, over the top acting and attempts to render 1980s Toronto as gritty and you get pure retro-Canadian TV. And I love every minute of it.
|From the theme song: “I feel the night heat, I feel your heartbeat, something ain’t right, there’s too much heat in the night.” They don’t write lyrics like that anymore.|
10:22: Market Gal makes her first appearance. She’s on vacation but thankfully has a full-day planned and won’t be giving me too much grief for doing the diary. I mentioned my excitement about Night Heat and she replied, “Isn’t that the one with Carroll O’Connor?” That was In the Heat of the Night. Now all we need is a show titled, In the Night of the Heat.
10:23: Another E*Trade commercial on BNN. I’m going to see this commercial 500 times today. I think BNN only has 10 commercials in rotation at any one time. For some reason this reminds me of WKRP in Cincinnati and their sales manager Herb Tarlek. Who could forget their top clients, “Red Wigglers, The Cadillac of Worms” and “Ferryman’s Funeral Home?”
10:31: CNBC reporting that natural gas inventories are higher than expected and the spot price is now down over 4% to less than $7 a unit. Remember a couple of years ago when it was trading over $14? Here’s hoping you didn’t lock in your supply when those marketing company trolls were in your neighbourhood trying to scare everyone back in 2005. In any event, there has to be a point when natural gas investments are going to be value plays.
10:49: BNN continuing to chat about energy prices and the fact that oil is now over $70 a barrel, with long-term contracts trading at record levels. My top holding in the energy sector remains Bonavista Energy Trust (BNP.UN on the TSX). It’s not the cheapest, but operationally it continues to deliver. I want a company of decent operators who are committed to a sustainable model.
10:54: CNBC interviewing an analyst who uses price to sales as a key valuation metric and host Mark Haines notes the similarities with the approach used by James O’Shaughnessy, the guy who manages billions for RBC, and a healthy portion of my mutual fund dollars. I’m a big fan of O’Shaughnessy’s book, What Works on Wall Street, although you really need to be interested in the markets to make it a worthwhile read.
11:15: Another E*Trade commercial. It’s entirely possible that by the end of the day I’ll be shoving an ice-pick into my temple.
11:17: CNBC is really focusing on Apple’s iPhone and the whole “smartphone” phenomenon. One of their guests just commented that, “you can do a lot more with your phone than just talk into it.” To be honest, that’s about all I want to do with my cell phone, but I’m obviously running counter-trend.
11:22: CNBC now wading into the immigration debate that’s gripping the US Senate. I find that CNBC focuses more on politics than other financial networks, but I really wish they’d devote more attention to how political considerations affect the stock market. When I’m tuned to business television and they’re talking politics, the only thing I care about is how the politicians are going to influence the performance of my portfolio. In Canada, this means asking “how is the Canadian government going to make my investing life more difficult today?”
11:30: BNN switches to Kim Parlee and the show, Talking Tax. Meanwhile, Market Gal unexpectedly calls in during the middle of a Tim Hortons run. I’m going with the Ham and Swiss combo, Canadian maple donut and a Diet Coke. I’m feeling more and more Canadian with each passing moment. It’s official: I’m now ready for Canada Day. And for the record, I still think Tim Horton’s stock is pricey.
11:38: Talking Tax rolling along with questions related to selling a cottage, tax-loss selling on investments, and other meat and potatoes stuff. This gives me the chance to check some additional analyst reports on the Net. CIBC World Markets noting that the popularity of an initial public offering of master limited partnership units (Spectra) may have left several other pipelines and utilities undervalued by comparison. Speaking of that…
TransCanada Corporation (TRP on the TSX)
I’ve been a holder of TRP for seven years now, having initiated the position just after they cut their dividend back in 2000. At that time the stock tanked and was a glaring value candidate. Over the past several years I’ve added to the positon several times, at prices ranging from the mid-teens to the early $30 range. Recently the stock surged past $40 and I decided to pare 30% of the position on valuation issues. With interest rate concerns running high, the stock has since come back to $36 and is starting to look intriguing again. Even after paring back, it’s still one of my top 5 holdings. Back to the diary…
11:59: We’re nearing the 4-hour mark and I’m surprisingly fresh. Scratch that, they just aired another E*Trade commercial.
12:10: Market Gal popped in, noting that Sue Herrera of CNBC “is not as blonde” as she used to be. I may need to bribe Market Gal to hang around for a while.
12:14: CNBC is discussing the performance of wine-maker Constellation Brands and noted that high end wine sales are strong, but so are sales of something called the “Two-Buck Chuck.” Time to Google. Ah, Trader Joe’s in the US offers a number of low-price California wines that are called, “Two-Buck Chucks.” I love the Internet.
12:19: Gold up $7.10. I know very little, but I do know this: I’d make a horrible trader.
12:22: More about the iPhone. I’m definitely not an early adopter of technological product and this thing is extremely expensive…but it does look exceptionally cool. Although what’s the deal with the 4-8 hour battery life? Isn’t that like having a car with a 10-litre gas tank?
|It’s cool, it’s multi-functional, and it’s going to be very popular…but the Market Guy isn’t ready for an iPhone|
12:27: BNN’s Michael Kane just presented the following factoid: Poland is concerned about governmental red tape and has established 7 committees to investigate the issue. I didn’t know the BCE board was doubling as the Polish government.
12:30: Market Call begins, arguably BNN’s flagship program. Paul Harris of Avenue Investment Management is in the chair to answer viewer questions about large caps. I’m not very interested in the top picks or even the opinions offered by the guest. Rather, I use the information as an opportunity to learn more about different companies and as a starting point for additional research. It’s also useful in monitoring changes in sentiment on the market or individual stocks.
12:40: Let’s agree to eliminate the phrase, “I’ll hang up and listen to your comments” from the Market Call vernacular. This needs to go away.
12:50: Harris recommends investors look abroad for their exposure to financial services. I don’t know enough about international financials, so I’ll use mutual funds to gain exposure. However, I am comfortable maintaining specific positions in Canada. Speaking of that, time for another…
Bank of Montreal (BMO on the TSX)
Over the course of my life, I’ve tried to live by a certain code. Specifically, I’ve found it useful to live according to a number of guidelines that help to improve my chances for success. Here are 4 examples:
- only use credit cards that give you points
- never under any circumstances trust a Blue Jay’s bullpen
- try to enjoy every sandwich (this one courtesy of Warren Zevon)
- in a low-interest rate environment, never pass up a 4% yield on a Canadian bank stock, especially when it’s trading above it’s average yield, exhibits a relatively low price to book ratio (always an important valuation metric for banks) and is despised by analysts.
BMO exhibits all of the characteristics associated with the latter, so I nibbled on a small opening position at just over $67. Sure, the bank is experiencing some revenue growth issues, but relative valuation and rumblings from management leave me optimistic. Anyway, the trade expands my direct bank holdings to TD and BMO, with indirect holdings spread across several mutual funds. Back to the diary…
1:12: Paul Harris scores a 3 on the Market Call Smugness Index (MCSI). Put in perspective, Brian Acker scores a 10, Ross Healy an 8, Sandy McIntyre a 3. David Driscoll isn’t smug. He just hates 95% of the stocks that people ask about and doesn’t relish talking about crap. Personally, I think this is positive because guests who love everything aren’t especially useful.
1:22: CNBC talking about the iPhone again. There are concerns in the US about the ability of AT&T’s network to handle the traffic. The analyst says they need a G3 iPhone. How about a day’s worth of battery life? That might be good.
1:25: Harris’s top picks are E-Bay, Allied REIT and Sceptre Investments. I’ve now hit the first psychological lull of the day. I need some fruit.
1:27: Michael Hainsworth is a good host for Market Call and asks some decent questions. It’s essential to have a host who isn’t afraid to challenge statements, knows the subject matter, and probes a little bit. In other words, you need the exact opposite of Larry King.
1:29: I really wish Market Call would throw up a board that offers some bullet-points on the investing philosophy of their guests. That would be a great lead-off for the show and would add some context for the opinions that follow. Hey, this stuff matters.
1:32: It’s day 58 since the Conrad Black trial began. BNN is back to Chicago and an update from Amanda Lang. At least Market Gal isn’t around right now. Every time Amanda appears on camera I get the, “you think she’s cute.” Russell Crowe needs to put out a film in order to balance things out.
1:34: Pat Bolland has taken his jacket off. The business channel must be getting down to business.
1:53: Andrew Bell reporting on Dundee REITs decision to sell all of its eastern assets to GE and switch to being a smaller, western Canada REIT. There are concerns that Dundee ‘s management contract will cost investors between 90 cents and $1.35 a unit. I’m a holder of Dundee, but may sell in advance of the transaction. It’s been a good run and one of the best investments that I’ve made in the last 5 years. But the valuation discount that followed the REIT has all but disappeared. Artis (AX.UN) seems to be the consensus discount candidate in the REIT space.
2:00: If I weren’t doing this diary, there would be serious competition for my viewing dollar. Two stations are currently showing Star Trek reruns. I haven’t been this torn since AMC was playing Fast Times at Ridgmont High and Space was showing The Terminator. Spicoli or Sarah Connor? How can you go wrong?
2:10: The US Federal Reserve is about to make its decision on interest rates. CNBC is on it like spit and has two anchors and a commentator in studio and 3 other reporters on remote. With 6 people opining, they’ll probably let each person talk for about 8 seconds at a clip, so that should be fun. They’ve added the graphic “FED DECISION IMMINENT” on screen. All we need is some important music and we’ll have ourselves an event.
2:15: The Fed has left interest rates unchanged. They dropped the word, “elevated” from their description of core inflation, but aren’t convinced that it’s under control. I think this also describes Lindsay Lohan. Anyway, the CNBC crew is analyzing the announcement like it’s the Zapruder film. High oil prices, moderating growth and the adjustment in housing prices are seen as preventing the Fed from raising rates. No surprises here.
2:24: I’m one more E*Trade commercial from needing some caffeine. Let’s make it tea in my New York Stock Exchange mug. We’re almost 6.5 hours into the diary. Market Gal just came down to offer, “you’re insane.”
2:43: In response to a report about iPhone customers waiting in line for hours before the product launch, BNN anchor Marty Cej remarks that, “nerds travel in herds.” That remark would ordinarily cost him a 500% increase in the amount of spam headed to his inbox. However, all those who know how to spam are in line waiting for iPhones.
2:45: One of the BNN graphics notes that the Fed decision will be coming out at 2:15. I’ll have to watch for that. OK, I’m getting punchy
2:49: I wonder if there’s going to be an appearance by CIBC chief economist Jeff Rubin, and if so, will he be sporting a mullet? He’s the Barry Melrose of Bay Street.
|If there’s one thing that 13 hours of business television needs, it’s more mullett!|
2:58: CNBC just mentioned that they went 58 minutes without mentioning the iPhone. Maria Bartiromo, the so-called “Money Honey” makes an appearance. She highlights that McDonalds is one of the day’s laggards. Perhaps if they offered the BLT bagel all day, things would be different.
3:02 : Bartiromo notes that Michael Moore will be appearing in the next hour, and the graphic suggests, “First on CNBC.” Sure, he’s first on CNBC if you neglect his appearance on Letterman, the Daily Show, and just about everywhere else. Other than that, CNBC has him first.
3:05: It’s 19 degrees in Ottawa and my neighbour’s air conditioning just came on. Someone get David Suzuki on the phone.
3:20: It’s time to place a call to my buddy Bouch. He’s worked at a gas station, managed the accounts for a courier company, sold life insurance, and starred in his own adult film. OK, so I made one of those up. He’s now running the small business portfolio at a branch of one of the big 6 banks. If there’s one thing that I’ve learned from our conversations, it’s that the banks always get their money. As a shareholder, that brings warmth to my heart and a spring to my step.
3:37: Speaking of porn, CNBC will be interviewing one of the honchos for the company that publishes Blender, Stuff, and Maxim magazines. Between high tech gadgets and this stuff, the testosterone levels of the day have just peaked.
3:46: Bartiromo now interviewing Michael Moore in front of the NYSE. Apparently they couldn’t get him into the exchange so they had to move outside. There’s something fishy about the whole thing. Anyway, Moore hanging around Wall Street is quite a sight. I haven’t been this uncomfortable since Rafael Nadal won the French Open wearing capri pants.
Moore is promoting his film, “Sicko” and wants people to divest their holdings in private health companies, as he deems the profit motive incompatible with the providing of health care services. Bartiromo states that if she gets sick, she wants to get treated in the good old US of A. Moore counters with, “well you work for CNBC and have a great health plan,” but wonders about the 47 million Americans who lack coverage. Some great TV going on here.
4:00: Markets closed, but the business television machine continues to roll along. TSX finishes down 26, Dow down 5, the dollar up over a cent. It was a mixed bag for the financials. Speaking of that, time for another…
Sun Life Financial (SLF on the TSX)
I’ve initiated a small position in Sun Life Financial at roughly $50. It’s trading at a higher than average historical yield, is just off its high yield, exhibits excellent valuation metrics nearly across the board, and sports a growing dividend. Historically the company has turned in lower earnings growth and return on equity than many of its peers. This has left the shares trading at a justifiable discount. However, the company has been making a number of improvements that should narrow the spread. I’m just nibbling here…no rush. Back to the diary…
4:11: TV-Tropolis is running Beverly Hills 90210. The digital guide description reads, “Brenda sneaks around with Dylan without her parents knowing; Steve takes a job at the Peach Pit.” I must resist.
4:31: BNN is discussing Starbucks and the fact that the coffee company isn’t doing as well since it decided to open stores in less affluent neighbourhoods. You mean those near the poverty line aren’t waiting 10 minutes to pay $7 for a cup of coffee? Who would have guessed? Meanwhile Market Gal just came by with some fresh strawberries. Good call.
4:37: BNN news ticker still reporting that the Fed will be releasing their decision at 2:15. I’ll have to tune in.
4:45: We’ve gone the entire day without the Harper government releasing a new policy that screws with investors. Damn, I just jinxed it. I feel like the idiot who speaks to the pitcher during the 8th inning of a no-hitter. Now I’m going to be on edge until bedtime.
4:54: Research in Motion beats the street on stellar subscription additions. Good for them, but I just don’t care. I can’t bring myself to buy such an expensive stock even if there’s growth behind the numbers. We also learn that by 2008, half of the world will live in cities. In the years ahead there’s going to be a lot of government spending on infrastructure, that’s for sure. Hmmm, that might be something for an investor to care about.
5:00: CNBC is switching to Kudlow and Company, which always seems to include a fair amount of “everything in the US economy is just great because we’re Americans” approach, with the daily proviso that the Democrats must be stopped because (to paraphrase) “they hate America.” They also make heavy use of 4 panellists at a time, which leads to exceedingly quick points, occasional yelling, and not much depth. This is all irrelevant because it’s now time for my favourite show on BNN: Squeeze Play with Amanda Lang and Kevin O’Leary. She’s in Chicago, he’s in Toronto.
I find O’Leary to be one of the best things about BNN, in large part because he always keeps the focus on how each issue relates to making money. He’s also endlessly entertaining and his use of language is certainly unique for a business channel. For example, dividends aren’t just beneficial; they are “succulent.” Government interference isn’t just annoying, it’s “evil and sinister.” He also exhibits an excellent on-screen dynamic with Amanda, in large part because she’s not afraid to challenge the big guy and he seems to enjoy the challenge. I also like the show because they let the guests talk, which isn’t always the case on television.
Today’s guests include Andrew Pyle of Scotia McLeod and Andy Busch of BMO to talk about the Fed decision. Pyle doesn’t see inflation risks, but does see stagnation, while Busch notes that we didn’t learn anything new today. He expects no change in rates for a while and also suggests that the private equity party may be nearing an end.
Busch asserts that for now, cash is king. Interestingly enough, my biggest holding is cash, which I’ve parked in a high interest savings account yielding over 4%. Anyway, Busch also recommends buying $US as “it’s going to be a grind getting to parity.” Meanwhile Pyle is favouring energy, a few bonds on the front end, and the avoidance of consumer discretionary stocks.
Even though my fixed income investments have been hit lately, I’m not going to forget why I own bonds in the first place: to diversify my holdings and moderate the risk of my portfolio. Speaking of bonds, here’s a…
PH&N Total Return Bond Fund
You may recall that in the last edition of the column, I was debating on how best to increase the fixed income portion of my portfolio. I settled on the iShare Canadian Bond Fund, but also decided to maintain an existing position in the TD Canadian Bond Fund. Several readers emailed asking that if I absolutely had to have an actively managed bond fund, why didn’t I sell my units in the TD Fund and switch to the PH&N offering, which sports significantly lower expenses (MER of only 0.59%) and a stellar performance record. Well, I’d dismissed the PH&N offering because my broker was charging a ridiculous fee to purchase PH&N funds. I refuse to pay a fee when buying mutual funds. It’s not happening. Well, a few months ago I opened another brokerage account with a firm that doesn’t charge for PH&N funds. So I dumped TD Canadian Bond and picked up the PH&N Total Return Bond. So now I have a core, actively managed bond mutual fund and a solid, passively managed bond ETF. Done! Back to the diary…
5:30: Technical issues mean they aren’t able to interview bond guru Bill Gross, which sucks big-time. Gross is a good get for the program, especially on Fed announcement day. So they talk about Conrad Black (Kevin refers to Lord Black as being a modern-day “Napoleon”) and then, surprise, the iPhone. We learn that the device may have a 300 imprint, meaning that you can only charge it 300 times before it becomes dysfunctional. We also learn that once the battery is spent, you have to send it back to Apple. It’s not as simple as pulling out the battery and replacing it yourself. Yeah, I’m going to spend $500 on that. I’ll wait a few years until all of the bugs are worked out and it’s retailing for $129.
5:45: Now they’re talking about companies that donate to charity. Kevin offers the following: “The DNA of a corporation is to make money for shareholders….the only charity they should concern themselves with is shareholder wealth.” He believes that shareholders are welcome to donate their profits, but that companies shouldn’t be doing it for them. He also notes that CEOs should have to call shareholders and ask if it’s OK to donate some of the profits to charity. After all of this, Amanda notes that Kevin is “delightfully predictable.” I agree.
|Kevin on the environment: “Saving the planet is very important because we live here, but we have to make money Amanda. There’s no point being on the planet without money. That’s a miserable place. The cavemen tried it and it didn’t work.”|
6:05: CNBC is offering Mad Money starring ex-hedge fund manager Jim Cramer. I liked him as a guest host on the CNBC morning show Squawk Box. He was opinionated, charismatic, and always dynamic. His current show amplifies these characteristics but adds segments that include a range of sound effects, heavy background music, funky camera angles, and a completely over-the-top, exaggerated delivery. It’s clearly designed to appeal to young traders, speculators, and those with attention issues. Thanks, but I’ll pass.
6:10: Meanwhile BNN has Stars and Dogs with Andrew Bell and Kim Parlee. They start the show debating the wisdom of investing in a particular stock. One presents the case for the bears, while the other adopts the role of the bulls. The producer then selects a winner. Basically they are illustrating a decent investing practice: consider both the plusses and minuses before putting your hard earned money to work. We often get caught up in the excitement of the moment and fail to consider the downside. Behavioural finance clearly demonstrates our tendency to be overconfident and this can sabotage our chances of investing successfully.
6:15: Now they’re chatting about Le Chateau, a star clothing retailer that focuses exclusively on young people. The stock is up 51% over the past year. I’m always concerned about a retailer that focuses on a single age group. Although our hosts are telling us that 50-year olds are trying to look 19, and Le Chateau is more than happy to accommodate.
6:30: BNN presents The Business News with Howard Green. He’ll be updating the business news highlights of the day. Not a bad recap show and Howard asks some good questions. However, at this point I have a pretty good idea about the stories of the day, so I may have to spend the next hour contemplating my position in time and space…or my NFL fantasy draft. I’ll let my frontal lobe decide. Frontal lobe? Anyone in there? Right now I feel like Homer when he said, “Brain, you don’t like me and I don’t like you, but let’s just do this!”
6:50: E*Trade commercial still in the lead, but wait, coming up on the inside is that Xerox mute button, “surprised you even get it,” “bye bye bonus” commercial…and down the stretch they come! Whichever wins should be taken out to the back of the barn and shot.
7:05: Market Gal suggests Chinese food! I’m not sure if MSG is really going to help my brain right now…but what the hell. In addition to about 3 other items, we’ll get one of those token veggie dishes, you know, one of those dishes that you get to convince yourself that you’re not eating crap? You eat 1/5th of a green pepper, 1/10th of a celery stalk, ignore those midget corn thingies and call it a day?
7:08: I’m officially enjoying Howard Green’s tie and I think my hair is going to look exactly like his in about 10 years.
7:20: Howard just told us that after the break, he’ll be returning with “a little dope on the Fed.” Peace out, smack yo, Ho G!
7:30: Hey, it’s another edition of Market Call, only in half-hour form. And the guest, Robert Lauzon of Middlefield Capital is here to talk about uranium stocks. I think he looks a lot like Bruce McCulloch of Kids in the Hall. I called in Market Gal for a second opinion and she disagreed. But she once confused Jimmy Buffett with Warren Buffett so her vote gets a zero weighting.
|Good to see Bruce doing positive things with his new identity.|
7:40: I have no interest in uranium stocks. On the plus side, I keep expecting Rob to get up and start signing, “these are the Dave’s I know, I know, these are the Dave’s I know.”
7:50: I’m obsessing over this, but someone has to call in and ask him why Dave Foley hasn’t asked him to appear as a guest on All-Star Poker or whatever that show is called. I could have used this half-hour to actually learn something about uranium.
8:00: Now it’s time for Money Talk with Patricia Lovett-Reid, a certified financial planner. It’s a personal finance show that does a good job of covering some the basics and always makes me think of how vital it is for everyone to be more sophisticated about money. If I ruled the world, personal finance would be more prominently involved in the formal education of our young people. It seems strange to have kids who know the value of Pi, can tell you the capital of Manitoba, and know how to recite Shakespeare…but don‘t know about asset allocation, compounding, or how to get the best rate on a mortgage.
8:14: Now Patty is giving us some advice about holding a successful garage sale. Next up is a consideration of disability insurance. Geez, they’re covering some ground.
8:30: The final show and the final half-hour of our journey. Unfortunately it just happens to be the show that I’m least interested in: Strictly Legal, a show about legal advice for personal business owners. Or at least that’s what the digital guide says. This is the only BNN show that I’ve never seen and it’s really going to test my attention span. I completed a law degree a few years back, but had to force myself to finish up before heading over to psychology. I may start having flashbacks.
8:32: For some reason they’re dealing with the “big issues that face this country.” OK, I’m definitely not ready for this…and I’m not sure they are either.
8:51: Ticker go by fast, pretty red and green, guest say “something something.”
8:55: I’ve watched over 13 hours, close to 800 minutes, and probably 42 E*Trade commercials. I’m exhausted, about 20 minutes away from having a Lord of the Flies moment, and only about 2% of you are actually still reading this. So it’s time to bid adieu. Let me leave you with one final thought: If I can spend 13 straight hours watching business television, here’s hoping those of you reading the column just for the goofiness can spend an hour per week learning about investing and personal finance. Hey, maybe start reading the business section of the Globe and Mail or your favourite daily. Poke around the Internet and learn about the money issues that are most relevant to you, whether it’s retirement planning, saving for your child’s education or learning about constructing a diversified portfolio. Head to the Financial Webring Forum and enter the section devoted to beginners. You have to start somewhere…and the knowledge adds up over time. It’s all about empowerment. And for the sake of whatever you call a god, have some fun with it. More ideas as we move ahead.
9:00: Thanks everyone! I’m going to bed.
The Market Guy is an Instructor with the Department of Psychology at Carleton University. He’s not a professional advisor. He’s just a guy who loves investing and talking about the markets…so do your homework before making any investment decisions. Basing any decisions on his column would be really, really stupid. He was disappointed in Wendy’s new burger, The Baconator. Send your beefs to firstname.lastname@example.org